Contract Pharmaceutical Manufacturing Market To Witness Significant Growth By 2026
Pharmaceutical
companies are now pushing hard to reduce overall manufacturing and
research costs by outsourcing various processes related to research,
development and manufacturing. Furthermore, patent expiration and
generic drug competition, continue to fuel demand for pharmaceutical
contract manufacturing organizations in the market.
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Rising number of
Food and Drug Administration (FDA) approvals and clinical trials are
supporting growth of biopharmaceutical industry, which in turn is
fueling growth of the contract pharmaceutical manufacturing market.
For instance, according to ClinicalTrials.gov, from September 2008 to
October 2018, there were around 288,064 clinical trial studies
registered. In addition, there is a significant increase over the
past few years with registered clinical studies of 205,428, 233,234,
and 262,429 in 2015, 2016, and 2017, respectively.
Furthermore,
stringent regulatory policies for clinical research studies and
manufacturing make entire drug manufacturing process more complex, as
it requires more resources to develop new drugs and biologics. These
processes require expertise in broad scientific disciplines of
preclinical, clinical, ancillary clinical in chemistry, packaging,
manufacturing, project management, and regulatory affairs, which are
provided by the CROs and CMOs. This is considered as a major reason
for pharmaceutical companies to outsource clinical trials and
manufacturing processes.
Market Dynamics
Contract
manufacturing organizations (CMOs) provide wide range of
manufacturing services, which include contract packaging, quality
testing, and development service to pharmaceutical and biotechnology
industries. Biopharmaceutical companies prefer CMOs due to the
complexity involved in manufacturing process of biomolecules, as it
consists of different shape, size, and behavior with significantly
complex process than pharmaceutical drugs. Furthermore, by
outsourcing manufacturing capabilities from contract manufacturing
organization, allows recruiter firms to focus more on the research
and development (R&D), product development, and marketing
aspects.
Pharmaceutical
market is increasingly concentered with generic products and is
highly competitive with various companies located in Asia Pacific,
which are entering into the developed markets such as the U.S.,
Germany, France, and the U.K. Rising number of patents expiring in
the near future serves to be a major opportunity for generic drugs
manufacturers to prosper in the market.
Furthermore, mergers
and acquisitions between generic drug manufacturers, with major
players focusing on enhancing their product portfolio through
inorganic strategies, will support the addition of generic drug
portfolio into company’s offering and thus, generating demand for
CMOs to fulfil it.
For instance, in
August 2016, Teva Pharmaceuticals Industries strengthened its
position in the generic drugs market through acquisition of the
generic segment of Allergan, plc for US$ 40.5 billion. This resulted
in significant growth in revenue contribution of its generic drug
segment, pegged at US$ 9.5 billion in 2016
Growing Need to
Outsource Small Molecules’ Manufacturing is expected to Augment
Market Growth
Demand for small
molecules is considerably high compared to large molecules, owing to
its various advantages in manufacturing and clinical trial studies.
For instance, according to Cambrex Corporation, 2017 report, small
molecules dominates in the pharmaceutical industry, having 34 small
molecule new entities being approved in 2017, which is the highest
number in the last decade, by the U.S. Food and Drug Administration
(FDA). Furthermore, small molecules can be engineered to deliver
strong therapeutic effect with small dose, below 10 mgs and even
micrograms.
In addition,
according to the data published in BioPharm International Journal in
October 2015, small-molecule pharmaceuticals accounted for 82% of all
new drug application (NDA) approvals and 60% of all new molecular
entities in 2014. Furthermore, it represented two-thirds of the drug
development pipeline. Contract manufacturing organizations act as an
additional manufacturer site in company’s multiple site supply
network, providing backup capacity and increasing supply security.
Rising Demand for
Generic Drugs is expected to Propel the Market Growth
Development of
generic drugs offer opportunities for manufacturers, as consumers’
demand for cost-effective pharmaceuticals is increasing. Patients
being treated for chronic disease using generic drug are more likely
to continue their drug therapy and have their prescriptions refilled
than those using branded drugs. Moreover, the expiration of patents,
emerging markets, increasing geriatric population, rising prevalence
of chronic diseases, and the efforts of governments and healthcare
service providers have contributed to the increased use and
acceptance of generic drugs. This increasing demand for generic drugs
is offering lucrative growth opportunity for contract pharmaceutical
manufacturing organizations in the near future.
Furthermore,
adoption of novel manufacturing technologies, increased competition,
and shrinking profit margins has compelled pharma companies to
outsource its production processes and R&D of the drugs to
contract research organization (CRO) and contract manufacturing
organizations (CMO), to stay competitive in the market.
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Some of the key
players operating in the contract pharmaceutical manufacturing market
are Accenture plc, Cognizant Technology Solutions, ATOS SE, Catalent,
Inc., Covance, Inc., Boehringer Ingelheim GmbH, Genpact Limited,
Lonza Group, PAREXEL International Corporation, Quintiles
Transnational Corporation, Abbvie, Inc., Baxter International Inc.,
Dr. Reddy’s Laboratories Ltd., Aurobindo Pharma, Pfizer, Inc., The
Almac Group, Teva Pharmaceutical Industries Ltd. and Piramal
Enterprises Ltd.
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